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Amdocs Limited Reports Record Quarterly Revenue
Amdocs Reports Growth in Quarterly Diluted Non-GAAP Earnings Per Share to
$0.56; Diluted GAAP Earnings Per Share of $0.44
Key highlights:
* First quarter revenue increased to $742 million, in line with guidance
* First quarter diluted non-GAAP EPS, excluding acquisition-related costs
and equity-based compensation expense, net of related tax effects,
increased to $0.56, in line with guidance
* Diluted GAAP EPS of $0.44 for the quarter
* Free cash flow of $59 million for the quarter
* Strong sales activity across geographies and product portfolio,
highlighted by a significant expansion of managed services activities at
AT&T
* Second quarter fiscal 2008 guidance: Expected revenue of approximately
$757-$767 million and diluted non-GAAP EPS of $0.57-$0.59, excluding
acquisition-related costs and approximately $0.05-$0.06 per share of
equity-based compensation expense, net of related tax effects. Diluted GAAP
EPS is expected to be approximately $0.44-$0.47
* Reiterating fiscal 2008 guidance: Expected revenue of approximately
$3.05-$3.15 billion and diluted non-GAAP EPS of $2.29-$2.39, excluding
acquisition-related costs and approximately $0.20-$0.23 per share of
equity-based compensation expense, net of related tax effects. Diluted GAAP
EPS is expected to be approximately $1.82-$1.95
ST. LOUIS, January 22, 2008 /PRNewswire-FirstCall/ -- Amdocs Limited
(NYSE: DOX) today reported that for the quarter ended December 31, 2007,
revenue was $742.3 million, an increase of 7.4% from last year's first
quarter. Net income on a non-GAAP basis was $123.3 million, or $0.56 per
diluted share (excluding acquisition-related costs, which include
amortization of purchased intangible assets, and excluding equity-based
compensation expense, net of related tax effects, of $27.6 million),
compared to non-GAAP net income of $118.1 million, or $0.53 per diluted
share, in the first quarter of fiscal 2007 (excluding acquisition-related
costs, which include amortization of purchased intangible assets, and
excluding equity-based compensation expense, net of related tax effects, of
$24.8 million). The Company's GAAP net income was $95.7 million, or $0.44
per diluted share, compared to GAAP net income of $93.3 million, or $0.42
per diluted share, in the first quarter of fiscal 2007. Free cash flow for
the quarter was $59.0 million, comprised of cash flow from operations of
$93.1 million less $34.1 million in net capital expenditures and other.
"We are pleased with our results for the first quarter of fiscal 2008
and believe that we are positioned to achieve our goals for this fiscal
year," said Dov Baharav, chief executive officer of Amdocs Management
Limited. "This was a very good quarter in terms of new sales, highlighted
by the significant expansion of our managed services activities at AT&T and
our win at Sprint. We are seeing service providers continue to introduce
new products and services over next-generation networks, driven by the
increase in data and content activities and by industry consolidation.
While we recognize that there are some macro economic indicators that cause
uncertainty, we continue to see demand for Amdocs products and services and
expect that we will continue to expand our business in 2008."
Amdocs had numerous wins across lines of business and geographies in
the first quarter. These wins include a significant extension and expansion
of an existing AT&T seven-year managed services agreement under which
Amdocs will now support existing customer care and billing platforms. The
Company also signed an agreement with Sprint to provide and support
customer experience systems for Xohm, Sprint's WiMAX initiative. In
addition, the Company continued to expand its presence in emerging markets
around the world with a number of new wins, including new logos.
Financial Outlook
Amdocs expects that revenue for the second quarter of fiscal 2008 will
be approximately $757-$767 million. Diluted earnings per share on a
non-GAAP basis for the second quarter are expected to be $0.57-$0.59,
excluding acquisition-related costs and approximately $0.05-$0.06 per share
of equity- based compensation expense, net of related tax effects. Diluted
GAAP EPS is expected to be approximately $0.44-$0.47.
Reiterating fiscal 2008 guidance: Expected revenue of approximately
$3.05-$3.15 billion and diluted non-GAAP EPS of $2.29-$2.39, excluding
acquisition-related costs and approximately $0.20-$0.23 per share of
equity- based compensation expense, net of related tax effects. Diluted
GAAP EPS is expected to be approximately $1.82-$1.95.
Amdocs will host a conference call on January 22, 2008 at 5 p.m.
Eastern Time to discuss the Company's first quarter results. The call will
be carried live on the Internet via www.InvestorCalendar.com and the Amdocs
website, www.amdocs.com.
Non-GAAP Financial Measures
This release includes non-GAAP diluted earnings per share and other
non- GAAP financial measures, including free cash flow, non-GAAP cost of
service, non-GAAP research and development, non-GAAP selling, general and
administrative, non-GAAP operating income, non-GAAP income taxes and
non-GAAP net income. These non-GAAP measures exclude the following items:
* amortization of purchased intangible assets;
* equity-based compensation expense; and
* tax effects related to the above.
These non-GAAP financial measures are not in accordance with, or an
alternative for, generally accepted accounting principles and may be
different from non-GAAP financial measures used by other companies. In
addition, these non-GAAP financial measures are not based on any
comprehensive set of accounting rules or principles. Amdocs believes that
non-GAAP financial measures have limitations in that they do not reflect
all of the amounts associated with Amdocs' results of operations as
determined in accordance with GAAP and that these measures should only be
used to evaluate Amdocs' results of operations in conjunction with the
corresponding GAAP measures.
Amdocs believes that the presentation of non-GAAP diluted earnings per
share and other financial measures, including free cash flow, non-GAAP cost
of service, non-GAAP research and development, non-GAAP selling, general
and administrative, non-GAAP operating income, non-GAAP income taxes and
non-GAAP net income, when shown in conjunction with the corresponding GAAP
measures, provides useful information to investors and management regarding
financial and business trends relating to its financial condition and
results of operations as well as the net amount of cash generated by its
business operations after taking into account capital spending required to
maintain or expand the business.
For its internal budgeting process and in monitoring the results of the
business, Amdocs' management uses financial statements that do not include
amortization of purchased intangible assets, equity-based compensation
expense, and related tax effects. Amdocs' management also uses the
foregoing non-GAAP financial measures, in addition to the corresponding
GAAP measures, in reviewing the financial results of Amdocs. In addition,
Amdocs believes that significant groups of investors exclude these non-cash
expenses in reviewing its results and those of its competitors, because the
amounts of the expenses between companies can vary greatly depending on the
assumptions used by an individual company in determining the amounts of the
expenses.
Amdocs further believes that, where the adjustments used in calculating
non-GAAP diluted earnings per share are based on specific, identified
amounts that impact different line items in the Consolidated Statements of
Income (including cost of service, research and development, selling,
general and administrative, operating income, income taxes and net income),
it is useful to investors to understand how these specific line items in
the Consolidated Statements of Income are affected by these adjustments.
Please refer to the Reconciliation of Selected Financial Metrics from
GAAP to Non-GAAP tables below.
About Amdocs
Amdocs is the market leader in customer experience systems innovation,
enabling world-leading service providers to deliver an integrated,
innovative and the intentional customer experience(TM) - at every point of
service. Amdocs provides solutions that deliver customer experience
excellence, combining the software, service and expertise to help its
customers execute their strategies and achieve service, operational and
financial excellence. A global company with revenue of $2.84 billion in
fiscal 2007, Amdocs has over 16,000 employees and serves customers in more
than 50 countries around the world. For more information, visit Amdocs at
www.amdocs.com.
This press release includes information that constitutes
forward-looking statements made pursuant to the safe harbor provision of
the Private Securities Litigation Reform Act of 1995, including statements
about Amdocs growth and business results in future quarters. Although we
believe the expectations reflected in such forward-looking statements are
based upon reasonable assumptions, we can give no assurance that our
expectations will be obtained or that any deviations will not be material.
Such statements involve risks and uncertainties that may cause future
results to differ from those anticipated. These risks include, but are not
limited to, the effects of general economic conditions, Amdocs ability to
grow in the business markets that it serves, Amdocs ability to successfully
integrate acquired businesses, adverse effects of market competition, rapid
technological shifts that may render the Company's products and services
obsolete, potential loss of a major customer, our ability to develop
long-term relationships with our customers, and risks associated with
operating businesses in the international market. Amdocs may elect to
update these forward-looking statements at some point in the future;
however, the Company specifically disclaims any obligation to do so. These
and other risks are discussed at greater length in the Company's filings
with the Securities and Exchange Commission, including in our Annual Report
on Form 20-F for the fiscal year ended September 30, 2007 filed on December
3, 2007.
Contact:
Thomas G. O'Brien
Treasurer and Vice President of Investor Relations
Amdocs Limited
314-212-8328
E-mail: dox_info@amdocs.com
AMDOCS LIMITED
Consolidated Statements of Income
(in thousands, except per share data)
Three months ended
December 31,
-----------------------
2007 2006
-------- --------
Revenue:
License $ 26,217 $ 31,744
Service 716,033 659,288
-------- --------
742,250 691,032
Operating expenses:
Cost of license 774 1,069
Cost of service 470,741 435,121
Research and development 56,015 60,468
Selling, general and administrative 97,665 89,170
Amortization of purchased intangible assets 21,753 17,698
-------- --------
646,948 603,526
-------- --------
Operating income 95,302 87,506
Interest income and other, net 8,816 11,739
-------- --------
Income before income taxes 104,118 99,245
Income taxes 8,454 5,903
-------- --------
Net income $ 95,664 $ 93,342
======== ========
Basic earnings per share $ 0.46 $ 0.45
======== ========
Diluted earnings per share (1) $ 0.44 $ 0.42
======== ========
Basic weighted average number of shares
outstanding 208,109 206,450
======== ========
Diluted weighted average number of shares
outstanding 222,039 222,718
======== ========
(1) To reflect the impact of assumed conversion of the convertible notes,
$985, representing interest expense and amortization of issuance
costs, were added back to net income for the three months ended
December 31, 2007 and 2006, for the purpose of computing diluted
earnings per share.
AMDOCS LIMITED
Selected Financial Metrics
(in thousands, except per share data)
Three months ended
December 31,
-----------------------
2007 2006
-------- --------
Revenue $742,250 $691,032
Non-GAAP operating income 131,271 120,529
Non-GAAP net income 123,290 118,116
Non-GAAP diluted earnings per share (1) $ 0.56 $ 0.53
Diluted weighted average number of shares
outstanding 222,039 222,718
(1) To reflect the impact of assumed conversion of the convertible notes,
$985, representing interest expense and amortization of issuance
costs, were added back to net income for the three months ended
December 31, 2007 and 2006, for the purpose of computing diluted
earnings per share.
AMDOCS LIMITED
Reconciliation of Selected Financial Metrics from GAAP to Non-GAAP
(in thousands)
Three months ended
December 31, 2007
----------------------------------------------------
Reconciliation items
----------------------------------
Amortization
of purchased Equity-based
intangible compensation Tax
GAAP assets expense effect Non-GAAP
-----------------------------------------------------
Operating expenses:
Cost of license $ 774 $ - $ - $ - $ 774
Cost of service 470,741 - (6,282) - 464,459
Research and
development 56,015 - (1,376) - 54,639
Selling, general
and administrative 97,665 - (6,558) - 91,107
Amortization of
purchased
intangible assets 21,753 (21,753) - - -
-----------------------------------------------------
Total operating
expenses 646,948 (21,753) (14,216) - 610,979
-----------------------------------------------------
Operating income 95,302 21,753 14,216 - 131,271
-----------------------------------------------------
Income taxes 8,454 - - 8,343 16,797
-----------------------------------------------------
Net income $ 95,664 $ 21,753 $ 14,216 $(8,343) $123,290
-----------------------------------------------------
Three months ended
December 31, 2006
----------------------------------------------------
Reconciliation items
-----------------------------------
Amortization
of purchased Equity-based
intangible compensation Tax
GAAP assets expense effect Non-GAAP
-----------------------------------------------------
Operating expenses:
Cost of license $ 1,069 $ - $ - $ - $ 1,069
Cost of service 435,121 - (6,322) - 428,799
Research and
development 60,468 - (1,778) - 58,690
Selling, general
and administrative 89,170 - (7,225) - 81,945
Amortization of
purchased
intangible assets 17,698 (17,698) - - -
-----------------------------------------------------
Total operating
expenses 603,526 (17,698) (15,325) - 570,503
-----------------------------------------------------
Operating income 87,506 17,698 15,325 - 120,529
-----------------------------------------------------
Income taxes 5,903 - - 8,249 14,152
-----------------------------------------------------
Net income $ 93,342 $ 17,698 $ 15,325 $(8,249) $118,116
-----------------------------------------------------
AMDOCS LIMITED
Condensed Consolidated Balance Sheets
(in thousands)
As of
---------------------------
December 31, September 30,
2007 2007
----------- ------------
ASSETS
Current assets
Cash, cash equivalents and short-term
interest-bearing investments $1,167,090 $1,179,280
Accounts receivable, net, including unbilled
of $73,355 and $63,441 respectively 530,957 493,418
Deferred income taxes and taxes receivable 114,701 117,623
Prepaid expenses and other current assets 105,233 98,746
----------- ------------
Total current assets 1,917,981 1,889,067
Equipment, vehicles and leasehold
improvements, net 282,551 283,839
Goodwill and other intangible assets, net 1,784,519 1,792,588
Other noncurrent assets 390,116 379,105
----------- ------------
Total assets $4,375,167 $4,344,599
=========== ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accruals $590,469 $592,937
Short-term portion of capital lease
obligations and other financing arrangements 2,105 2,055
Deferred revenue 165,979 173,775
Deferred income taxes and taxes payable 44,650 205,960
----------- ------------
Total current liabilities 803,203 974,727
0.50% Convertible notes 450,000 450,000
Noncurrent liabilities and other 472,298 319,629
Shareholders' equity 2,649,666 2,600,243
----------- ------------
Total liabilities and shareholders' equity $4,375,167 $4,344,599
=========== ============
SOURCE Amdocs Limited
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